Posts Tagged ‘quarterly finacial reports’

CN Says It Has Recovered from Pandemic Downtown

July 21, 2021

Canadian National said this week that its posted gains in second-quarter earnings and traffic, with nearly every traffic category growing in volume.

CN managers during an earning call said the results reflected a recovery from the COVID-19 pandemic-induced downtown.

Operating income skyrocketed by 76 percent, to $1.38 billion, as revenue grew 12 percent, to $3.6 billion.

Adjusted for the impact of one-time items, earnings per share increased 16 percent, to $1.46. The operating ratio was 61.6 percent, down from 75.5 percent a year ago but up 1.2 points when last year’s second quarter is adjusted for the impact of one-time items.

On a carload basis, overall volume was up 14 percent. It was up by 13 percent when measured by revenue ton-miles, the preferred metric of Canadian railroads.

The strongest traffic growth occurred in industrial products, intermodal, and propane traffic.

“Our results reflect broad-based trends and forward momentum across all of our business, and also the enduring power of our vast and diversified CN network,” CEO J.J. Ruest said.

CN said its terminal dwell and car miles per day improved, while average train speed was down 2 percent, to 19.5 mph.

The Montreal-based carrier set a quarterly record for fuel efficiency and posted a record low employee personal injury rate. The train accident rate also declined.

CN continues to say that its outlook for the remainder of the year will be high single-digit volume growth and double-digit growth in earnings per share.

CSX Optimistic About Traffic Growth

April 21, 2021

In taking a closer look at the financial performance of CSX in the first quarter of 2021, it becomes apparent that profits and revenue fell because declines in merchandise and coal traffic overwhelmed intermodal growth.

Nonetheless, during a conference call on Tuesday, company executives expressed optimism that traffic will grow overall this year due to a recovering economy shaking off the effects of the COVID-19 pandemic.

“We entered the year projecting volume growth in excess of GDP and still expect to achieve this target,” CEO James Foote said.

“We will continue to attract demand throughout the year, and based on the combination of the strengthening economic outlook and our focus on converting additional volumes off the highway, we now expect to achieve double-digit full year revenue growth.”

Quarterly operating income fell 7 percent to $1.1 billion while revenue declined 1 percent to $2.81 billion. Earnings per share slid 7 percent to 93 cents.

The operating ratio crept up by 2.2 points to 60.9 percent as expenses rose 2 percent.

CSX executives attributed the latter to the effects of employee COVID-19 infections, harsh winter weather, and a fuel surcharge lag.

Overall volume was up 1 percent for the quarter with intermodal traffic growing 10 percent on the strength of an increase in imports at East Coast ports.

Yet merchandise traffic fell 6 percent, largely driven by a 16 percent decline in automotive traffic and an 8 percent decline in chemicals traffic.

A global shortage of computer chips has hamstrung auto production in North American. The chips are placed in new vehicles.

Declines in chemical traffic were prompted by falling crude oil and frac sand shipments.

Coal traffic was down 5 percent, which CSX attributed to fewer exports.

Foote said going forward CSX is focused on improving its train velocity performance, noting that the pandemic and winter weather adversely affected crew availability.

Train velocity was down 11 percent while terminal dwell time was up 30 percent.

On-time performance, based on trip-plan compliance, fell for both intermodal and carload traffic.

Figures released by the company showed 85 percent of intermodal shipments arrived on time, down from 96 percent a year ago.

Merchandise carloads fulfilled their trip plans 67 percent of the time, down from 81 percent a year ago.

CSX operated a record 101 trains per day with distributed power and continued its trend of operating more freight on fewer but longer trains.

During the first quarter train length was up 13 percent and employment down 7 percent due to reduced need for train crews.

CSX Net Earnings Down in 4th Quarter

January 23, 2021

CSX reported this week that it had fourth quarter 2020 net earnings of $760 million or 99 cents per share, compared with $771 million or 99 cents per share in the same quarter in 2019.

For the last quarter of 2020, net income included a $48 million charge or 5 cents per share after taxes that was related to debt retirement.

Revenue during the quarter decreased 2 percent compared with the previous year to $2.83 billion.

In a news release CSX said intermodal growth was more than offset by lower fuel surcharge revenue and declines in coal traffic.

Expenses fell 7 percent in a year-over-year comparison to $1.61 billion, driven by fuel expenses and efficiency gains.

Operating income rose 5 percent to $1.22 billion from $1.15 billion compared with the fourth quarter of 2019.

CSX reported a fourth quarter operating ratio of 57 percent, which official said was a fourth quarter record.

In the fourth quarter of 2019 the operating ratio, which measures expenses as a percentage of revenue, was 60 percent.

CSX management expects traffic volume in 2021 to outpace gross domestic product growth, with merchandise volume growth exceeding industrial production.

Management expects intermodal volume to grown faster than merchandise and coal traffic to show some improvement over its 2020 levels.

The carrier is expected capital expenditures of $1.7 billion to $1.8 billion this year.

Falling Traffic to Highlight Reports

October 15, 2020

Ahead of third quarter financial reports being issued by the big six Class I railroads, Wall Street analysts are releasing their projections of what those reports will say.

The analysts project earnings will fall an average of 8 percent at the six publicly traded Class I systems.

Continued declines in traffic will highlight many reports with carload traffic for the industry having falling  9 percent on average during the third quarter.

However, intermodal traffic is on a growth spurt, rising 1 percent on average.

Coal traffic continues to be dismal with Class 1 railroads losing an average of a quarter of their coal volume.

CSX is expected to show the smallest overall quarterly traffic decline.

Overall traffic at CSX is expected to be down 3.8 percent, but its intermodal traffic has risen by a 6 percent.

Earnings at CSX are expected to be down 14.8 percent when it issues its report on Oct. 22.

Canadian National’s earnings are expected to plunge by 13 percent compared with the third quarter of 2019.

Norfolk Southern is expected to report on Oct. 28 a 4.8 percent fall in earnings.

Class 1 3rd Quarter Financial Reports Are Due to be Released This Month; Improvements Expected

October 10, 2020

North America’s Class 1 railroads will begin issuing their third quarter financial reports later this month and one Wall Street firm has already begun adjusting its expectations of what those reports will show.

In an article posted on the website of Railway Age magazine, Cowen & Company said it now expects the railroads to report freight volume lossess when compared to third quarter 2019 figures, but those numbers are expected to be an improvement over what was reported in the second quarter of this year.

During the second quarter of 2020, Class 1 railroads reported a 20 percent freight volume decline when compared with the same period in 2019.

Cowen expects carload volumes to check in at a 13.5 percent decline over 2019 while intermodal volume is expected to be up 2 percent over last year.

In a note to investors, Cowen analysts noted that despite losing substantial levels of freight traffic this year due to a COVID-19 pandemic-induced economic downturn, the practice of precision scheduled railroading with its emphasis on cost cutting has enabled some Class 1 railroads to post some impressive operating ratio figures of below 65 percent.

The operating ratio reflects what percentage of revenue is spent on operating expenses.

Only Norfolk Southern had an OR above 65 percent. NS reported its OR in the second quarter was 70.7 percent.

NS expected to report an OR of 62.5 percent in the third quarter due to aggressive cost reduction efforts.

Cowen said that it remains to be seen if Class 1 railroads will be able to continue to restrain their expenses in future quarters and to what extent.